Effect of errors in physical inventory Fonda Motorcycle Shop sells motorcycles, ATVs, and other related supplies and accessories. During the taking of its physical inventory on December 31, 2016, Fonda Motorcycle Shop incorrectly counted its inventory as $337,500 instead of the correct amount of $328,850. a. Slate the effect of the error on the December 31, 2016, balance sheet of Fonda Motorcycle Shop. b. State the effect of the error on the income statement of Fonda Motorcycle Shop for the year ended December 31, 2016. c. If uncorrected, what would be the effect of the error on the 2017 income statement? d. If uncorrected, what would be the effect of the error on the December 31, 2017, balance sheet?

BuyFind

Financial & Managerial Accounting

13th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781285866307
BuyFind

Financial & Managerial Accounting

13th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781285866307

Solutions

Chapter
Section
Chapter 6, Problem 6.18EX
Textbook Problem

Effect of errors in physical inventory

Fonda Motorcycle Shop sells motorcycles, ATVs, and other related supplies and accessories. During the taking of its physical inventory on December 31, 2016, Fonda Motorcycle Shop incorrectly counted its inventory as $337,500 instead of the correct amount of $328,850.

  • a. Slate the effect of the error on the December 31, 2016, balance sheet of Fonda Motorcycle Shop.
  • b. State the effect of the error on the income statement of Fonda Motorcycle Shop for the year ended December 31, 2016.
  • c. If uncorrected, what would be the effect of the error on the 2017 income statement?
  • d. If uncorrected, what would be the effect of the error on the December 31, 2017, balance sheet?

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Chapter 6 Solutions

Financial & Managerial Accounting
Ch. 6 - Cost flow methods The following three identical...Ch. 6 - Cost flow methods The following three identical...Ch. 6 - Perpetual inventory using FIFO Beginning...Ch. 6 - Perpetual inventory using FIFO Beginning...Ch. 6 - Perpetual inventory using UFO Beginning inventory,...Ch. 6 - Perpetual inventory using LIFO Beginning...Ch. 6 - Perpetual inventory using weighted average...Ch. 6 - Perpetual inventory using weighted average...Ch. 6 - Periodic inventory using FIFO, LIFO, and weighted...Ch. 6 - Periodic inventory using FIFO, UFO, and weighted...Ch. 6 - Lower-of-cost-or-market method On the basis of the...Ch. 6 - Lower-of-cost-or-market method On the basis of the...Ch. 6 - Effect of inventory errors During the taking of...Ch. 6 - Effect of inventory errors During the taking of...Ch. 6 - Inventory turnover and number of days' sales in...Ch. 6 - Inventory turnover and number of days' sales in...Ch. 6 - Control of inventories Triple Creek Hardware Store...Ch. 6 - Control of inventories Hardcase Luggage Shop is a...Ch. 6 - Perpetual inventory using FIFO Beginning...Ch. 6 - Perpetual inventory using LIFO Assume that the...Ch. 6 - Perpetual inventory using LIFO Beginning...Ch. 6 - Perpetual inventory using FIFO Assume that the...Ch. 6 - FIFO and LIFO costs under perpetual Inventory...Ch. 6 - Weighted average cost flow method under perpetual...Ch. 6 - Weighted average cost flow method under perpetual...Ch. 6 - Perpetual inventory using FIFO Assume that the...Ch. 6 - Perpetual inventory using LIFO Assume that the...Ch. 6 - Periodic inventory by three methods The units of...Ch. 6 - Periodic inventory by three methods; cost of...Ch. 6 - Comparing inventory methods Assume that a firm...Ch. 6 - Lower of cost or market inventory On the basis of...Ch. 6 - Merchandise inventory on the balance sheet Based...Ch. 6 - Effect of errors in physical inventory Missouri...Ch. 6 - Effect of errors in physical inventory Fonda...Ch. 6 - Error in inventory During 2016, the accountant...Ch. 6 - Inventory turnover The following data (in...Ch. 6 - Inventory turnover and number of days' sales in...Ch. 6 - Retail method A business using the retail method...Ch. 6 - Retail method A business using the retail method...Ch. 6 - Retail method A business using the retail method...Ch. 6 - Retail method On the basis of the following data,...Ch. 6 - Gross profit method The inventory was destroyed by...Ch. 6 - Gross profit method Based on the following data,...Ch. 6 - Gross profit method Based on the following data,...Ch. 6 - FIFO perpetual inventory The beginning inventory...Ch. 6 - LIFO perpetual inventory The beginning inventory...Ch. 6 - Weighted average cost method with perpetual...Ch. 6 - Periodic inventory by three methods The beginning...Ch. 6 - Periodic inventory by three methods Dymac...Ch. 6 - Lower-of-cost-or-market inventory Data on the...Ch. 6 - Retail method; gross profit method Selected data...Ch. 6 - FIFO perpetual inventory The beginning inventory...Ch. 6 - LIFO perpetual inventory The beginning inventory...Ch. 6 - Weighted average cost method with perpetual...Ch. 6 - Periodic inventory by three methods The beginning...Ch. 6 - Periodic inventory by three methods Pappa's...Ch. 6 - Lower-of-cost-or-market inventory Data on the...Ch. 6 - Retail method; gross project method Selected data...Ch. 6 - Ethics and professional conduct in business...Ch. 6 - LIFO and inventory flow The following is an...Ch. 6 - Costing inventory Golden Eagle Company begun...Ch. 6 - Inventory ratios for Dell and HP Dell Inc. and...Ch. 6 - Comparing inventory ratios for two companies...Ch. 6 - Comparing inventory ratios for three companies The...

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